Music Genre Not Saturated, Says Guitar Hero Exec

In spite of a precipitous drop in music game sales, RedOctane CEO Dan Rosensweig says he doesn't think the market is saturated and that there's actually a lot of room left for continued growth in the future.

The music game genre has taken a pummeling this year, with year-over-year sales down by 46 percent according to NPD numbers released earlier this month. It's not all bad; much of the decline has been driven by lower unit sales and the category is still the third best-selling of year, behind "General Action" and "Multiple/Other Sports," which just happens to be the home of Wii Fit. But it's hard not to see the numbers as a sign that people might be getting tired of throwing their money at an endless stream of Hero games.

Unless, that is, you happen to be Dan Rosensweig, chief executive at Guitar Hero publisher RedOctane, in which case everything is apparently just peachy. "It has been a difficult economic year for everybody. Videogames are down, music videogames in terms of overall are down, but most people don't understand that the music videogame category is actually the second largest selling gaming category period," he told CNBC. "So after Call of Duty, which will be an Activision game this year, the entire music genre and Guitar Hero franchise will actually be the number two selling game franchise."

He also dismissed concerns that the release of The Beatles: Rock Band could be putting the squeeze on the Guitar Hero franchise, saying that he welcomes competing products that can help grow the genre. Noting that Guitar Hero 5 has "out-reviewed" every other game in the category, he said, "I'm happy that more people are in the category and expanding the category, because any time you have a chance for us to compete, we always generally come out the winner."

"I don't think [the market] is saturated," he continued. "If you actually look at the number of consoles that are out there on a global basis, less than 20 per cent actually have a music game. So there's the next 80 per cent that we have the opportunity to go after. So there are more consoles, those consoles are getting more connected and we have the opportunity to sell more into that audience. So we're not particularly concerned about that."

His attitude is certainly upbeat but I suspect he might be a little more concerned than he's letting on. Activision is heavily invested in the music genre and with the Guitar Hero series being joined by the DJ Hero and Band Hero games later this year, a major downturn in the genre is just about the last thing it needs.